“Instead of solving a manufacturing problem, waiving TRIPS would likely create several…. Waiving IP rights would make it much more difficult to distinguish between legitimate products and those that are filled with saline, or something much more sinister. In such cases…we should expect global production starts and stops to become much more frequent.”
The petition by South Africa and India at the World Trade Organization (WTO) to waive most of the protections in the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement was all but dead. It failed in October, December, January, March, and May. Then, after the Biden Administration expressed in the most neutral terms is was “considering” and “discussing” the proposal, U.S. Trade Representative Katherine Tai yesterday announced U.S. support for text-based negotiations that “will take some time.”
IP rights are not the barrier to rapid production of vaccines advocates think they are, the waiver would cause more harm than possible good. The WTO would do much better to discuss removing obstacles to the trade of COVID-19 related items than removing intellectual property rights. There are 191 trade restriction measures on COVID-19 related supplies.
Rumor versus Reality
The petition and letters of support call the waiver “vital” and “essential” to produce the needed amount of COVID-19 related supplies and to ensure equitable distribution. However, the most direct reference in the petition that IP rights stand in the way is a rumor, only stating that “there are several reports about intellectual property rights hindering or potentially hindering timely provisioning of affordable medical products to the patients.”
No concrete evidence has been presented demonstrating that pharmaceutical companies have withheld production in hopes of a giant payday or have otherwise refused to license out production to a credible manufacturer.
In reality, IP rights have enabled them to enter into hundreds of licensing deals around the world to produce their vaccines, some of which are voluntary licensing arrangements. Moderna has even gone so far as to state it “will not enforce our COVID-19 related patents against those making vaccines intended to combat the pandemic” and committed to licensing its IP in the post-pandemic era as well. These licensing arrangements not only ensure legality of production but bring in the know-how and other technical expertise needed to allow contractors to fill orders on time and without cutting corners.
The bottleneck is in manufacturing capacity. When asked if control of patents was holding up production, the largest vaccine manufacturer in the world, Adar Poonwalla, CEO of the Serum Institute of India, said, “No. There are enough manufacturers, it just takes time to scale up.”
Instead of solving a manufacturing problem, waiving TRIPS would likely create several. In a recent webinar, former USPTO Direct Andrei Iancu called the waiver “a dangerous proposal” and that it “poses an immediate danger to the widespread distribution of quality vaccines” as it could lead to innovators “retreat[ing] into their trade secret shells and be[ing] less willing to engage in this worldwide collaboration.”
Iancu went on to say that the danger doesn’t end with limiting innovation and collaboration: “If we waive IP and take the original manufacturers out of the picture and anyone around the world can just make them at will, how are we going to control the quality of vaccines that go into people’s arms? How are we going to control for the potential fake vaccines?
Mass production of the complex multi-stage vaccines with supply chains that span the world presents its own challenges, even with the know-how that comes with licensing deals. Emergent BioSolutions, for example, botched 15 million doses of Johnson & Johnson’s COVID-19 vaccines, and may have botched 10 million of AstraZeneca’s doses as well. Luckily, none of those doses made it into people’s arms.
The same can’t be said for counterfeit Pfizer vaccines found in Mexico and Poland. Cartels have been caught setting up labs to produce fake vaccines, selling fake negative COVID-19 test results, and setting up fake websites that pose as official distributors. Waiving IP rights would make it much more difficult to distinguish between legitimate products and those that are filled with saline, or something much more sinister. In such cases, as investigators determine if adverse events or sub-par effectiveness originate from “real” vaccines or fake doses, we should expect global production starts and stops to become much more frequent.
This alarming aspect of IP theft was articulated by the FBI when it caught China, almost 12 months ago, attempting to steal intellectual property from U.S. organizations researching COVID-19 vaccines, stating “the potential theft of this information jeopardizes the delivery of secure, effective, and efficient treatment options.”
Waiver is Not an Efficient Solution
Finally, India’s argument for the waiver has nothing to do with the urgency the current situation demands at home. Four days before the petition, Indian Prime Minister Narendra Modi was positioning his country as a vaccine exporter. At the United Nations, he assured “the largest vaccine-producing country of the world” was ready to use its “vaccine production and delivery capacity.”
India perhaps believes that waiving IP rights may enable manufacturers in the world’s largest supplier of generic medicines to upgrade their capacity and play an even more outsized role in ending the pandemic. That would be a mistake. Brazil tried something similar when it issued a compulsory license for an anti-retroviral drug; it took two years for a domestic firm to reverse engineer it and develop the technical capacity to produce it. Trump advisor, Peter Navarro, experienced a similar fiasco when trying to convert Kodak into a COVID-19 pharmaceutical supplier. Dr Anthony Fauci, the chief medical adviser to the U.S. president, also warned the waiver was not the “fastest and most efficient way possible” to get shots into arms.
Indeed, despite the dire state of India today, the Modi government has only moderately altered its stance on vaccine protectionism. Government officials say it will choose not to import vaccines but “support domestic vaccine makers by guaranteeing purchases from them.” India, the world’s heaviest user of trade barriers, according to the International Trade Barrier Index, is one out of a handful of countries that actually levy tariffs on vaccines. Only recently has it decided to waive those tariffs and remove import regulations for states to bring in needed doses from abroad.
In the short-term, to rapidly increase production and distribution of vaccines, re-inventing the wheel isn’t necessary. Efforts at the WTO should focus on removing tariffs and export prohibitions; eliminating burdensome import requirements; vaccine recognition agreements; putting in massive orders for vaccines from proven manufacturers; and assistance to scale up manufacturing capacity.
In the long term, efforts need to be strengthened to fix the unequal protections of IP across the world to ensure greater participation in pharmaceutical development. Only the 15 countries with the strongest IP protections, according to the International Property Rights Index, are responsible for 85% of COVID-19 therapies in development.
Those protections allowed vaccine developers to attract funding from the U.S. government, private investors, colleges, and philanthropies for discovery stage mRNA research. Removing those rights diminishes the predictability and certainty they bring to such risky long-term investments. It also relinquishes control rights holders have to ensure equity in distribution and quality in production. The world should focus on solutions that get more vaccines into arms, and refrain from sacrificing an amazing system that has turned the tide against COVID-19.
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